Thread

Warren Buffett Steps Down as Berkshire Chairman, Names Son to Replace Him

323 points · 221 comments · saimiam

dugmartin · 1789732295 · focus · HN ↗
I guess Warren’s quote only applies to other people, not him. "It’s like choosing the 2020 Olympic team by picking the eldest sons of the gold-medal winners in the 2000 Olympics." (<a href="https://www.nytimes.com/2001/02/14/us/dozens-of-rich-americans-join-in-fight-to-retain-the-estate-tax.html" rel="nofollow">https://www.nytimes.com/2001/02/14/us/dozens-of-rich-america...)
1. nlitened · 1789734152 · focus · HN ↗
  As I understand, the son is there not to lead the company (Greg Abel is the CEO), but to oversee their family's share in the enterprise.
  1. yuuu · 1789734967 · focus · HN ↗
    I thought he was giving away 99% of his wealth?
    sarjann · 1789735944 · focus · HN ↗
    Probably in a charitable trust that will be managed by the family. With the trust owning the shares.
    nostrademons · 1789744140 · focus · HN ↗
    He was giving it to the Gates Foundation for Bill & Melinda Gates to manage, but that deal went into limbo when Bill showed up in the Epstein files and Melinda divorced him.
    csdreamer7 · 1789744709 · focus · HN ↗
    The money he is giving away is going to foundations managed by his children (last I read).
    nostrademons · 1789745145 · focus · HN ↗
    That's recent, just as of the last couple months. Historically the children's foundations have been a sideshow and he's given the bulk of his wealth away to the Gates Foundation. You can see that from the dollar amounts: this year's gift to the children's foundations was 1M BRK-B shares (the equivalent of about $500M) to each, while he's given away a total of $66B, over 120x as much.
    bluGill · 1789745950 · focus · HN ↗
    Though unlikely the case here, family foundations should always be looked at as a likely source of corruption.
    You cannot bribe me directly - that would be caught. However you can donate money to my family foundation and my kids (or spouse) will draw a large salary from it while doing almost nothing and they do some good for the world so it looks like a charity. Of course the kids/spouse will support me in various ways that all rich kids will.
    Again, probably not what is happening here, but every time you hear of a family foundation you should ask who they are using it to corruption in some form. Even when it doesn't seem to be you should still look.
    aetherson · 1789748656 · focus · HN ↗
    Even very large salaries are probably not a very significant amount of wealth for these people. I think this is a case where "all large numbers look the same."
    If Warren just directly gave his money to his three children equally, and paid 40% inheritance tax on that money, and then the children each just used 1% of that wealth per year, then they'd each get:
    144000000000 * 0.6 / 3 / 100 = $288 million each year.
    No foundation pays its CEO 10% of that much money. I think we may have to accept that in fact this is a way to give money to charitable causes, not just horde it.
    bluGill · 1789749045 · focus · HN ↗
    In this case yes. However that is not the case for all charities and so you need to look.
    paleotrope · 1789755360 · focus · HN ↗
    I wonder if they could even unwind the fortune to pay 40% in cash.
    aetherson · 1789827506 · focus · HN ↗
    I believe they wouldn't have to because of the stepped-up-basis, but my point is that even if somehow they were paying the full 40%, it's still an inconceivably large amount of money.
    mcdonje · 1789787510 · focus · HN ↗
    Even if that kind of corruption isn't there, these charities are still a net negative for society. Why do the super rich rail against taxes but then donate all of their money to family foundations? There are multiple reasons. Pull on that thread.
    aswegs8 · 1789992419 · focus · HN ↗
    It's more of a way to secure the fortune. You can't "secure" the personalities of all your offspring. If one of them gets out of line it could have disastrous consequences. Keeping it in a controlled institution boxes them in.

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